Fuel Subsidy Scam: EFCC Arraigns Seven More Suspects

 The Economic and Financial Crimes Commission (EFCC) said yesterday it has concluded arrangements to arraign seven more suspects in the on going trial of individuals and organisations implicated by investigations into the subsidy regime on imported fuel.

In a press statement signed by the commission’s acting head, media and publicity, Mr Wilson Uwujaren,  five of the suspects implicated in a N5.4billion fuel subsidy scam are to be arraigned today before Justice Lateefa Okunnu of the Lagos High Court, Ikeja, on a thirteen count charge bordering on intent to defraud, stealing, forgery and altering.

EFCC said that the suspects which comprise of one company and four individuals are: Nasaman Oil Services Limited, Mamman Nasir Ali, Christian Taylor, Oluwaseun Ogunbambo and Olabisi Abdul-Afeez (still at large). 

‘’Specifically, they are alleged to have obtained the sum of N4, 460,130,797from the Federal Government of Nigeria by falsely claiming that the sum represented subsidy accruing to them under the petroleum support fund for the importation of 61,049,937.00 litres of Premium Motor Spirit (PMS)’’.

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I Can Get Subsidy Thieves in One Week-Ribadu

The pioneer Chairman of the Economic and Financial Crimes Commission, Mr. Nuhu Ribadu, on Tuesday said he would have unravelled those behind the multibillion naira fuel subsidy scam in the country if he was still in charge of the anti-graft agency. The former EFCC boss, who currently chairs the Special Petroleum Revenue Task Force constituted by the Federal Government, stressed that failure of regulatory agencies in the petroleum industry led to the monumental fraud in the administration of the subsidy regime.

 Ribadu spoke as a guest at the Visitor’s Forum organised by the Nigerian Electricity Regulatory Commission. He said, “If the Petroleum Products Pricing Regulatory Agency had done its job, the whole subsidy mess would not have happened.

 If I were to handle this subsidy thing, I will just go after the PPPRA, especially those who were at the helm when all these mess took place. “In one week, I will bring out every single person who took one penny. I will not bother myself with anybody else; I will just get them because nobody would make a penny out of the subsidy regime without the direct complicity of the PPPRA.” Ribadu added, “The regulatory agencies in the sector are directly responsible because it is government’s money. 

When such money goes out, it has to go through somebody, who is a government employee that has responsibility to protect it and make sure that we get value for every dime spent. It must be with his own conspiracy that money goes out for products or services. “Therefore, one can easily come to the conclusion that it was a failure of the regulators and those that have responsibility, and we would like to see justice done on those who allowed the nation’s money to go out in that manner.”

 Ribadu also expressed confidence in the capacity of the present EFCC to get to the root of the fuel subsidy fraud, but added that the work could take more time than might have been anticipated by the public. He said, “I know that the EFCC is working very hard on the matter, and I believe they will not disappoint millions of Nigerians who are expecting a just and reasonable conclusion on the matter.

 They are working on it, and sometimes, this kind of work does take time so that it will be able to stand the test of prosecution. “They need to assemble evidence so that they can have a successful prosecution because it is an issue of law enforcement and recovery. My take is that we can still get justice; it is a matter of time, and, ultimately, I have belief that Nigerians will see justice done in the matter.”

 “They must be given space and time to do their work effectively. There should not be any outside interference. In the present crop of leadership in the EFCC, we have quality people; some of the best that we can get in our country today, in my personal view,” Ribadu added. He said as head of EFCC, he requested the London Metropolitan Police to investigate former President Olusegun Obasanjo and other top government officials. 

 He also expressed confidence in the capacity of the anti-graft agency to arrest and prosecute those involved in the controversial oil subsidy fraud. Obviously making reference to those that had criticised his work at EFCC for alleged bias, Ribadu said he made a request to the London MET to investigate Obasanjo and other top government officials, adding that some heavyweights in the administration were equally investigated and prosecuted by EFCC under his watch.

 He said that it was under his watch that a former National Vice Chairman of the Peoples Democratic Party, Chief Olabode George, was investigated and recommended for trial. Ribadu said, “We did the investigation and would have arrested him (George), but he escaped from the country. He only returned a few weeks after I was removed and was arrested by my successor and charged to court.”

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Fuel subsidy scam: Matters arising

When the Farouk Lawan-led House of Representatives ad hoc committee that investigated the 2009-2011 fuel subsidy payouts submitted its report to the House for deliberation, debate and consideration on April 18, 2012, Nigerians were saddened by the extent of rot uncovered. 

At the same time, they were very pleased with the mind-boggling revelations that vindicated their long time belief that the subsidy regime operated in Nigeria’s downstream petroleum sub-sector was nothing but a scam.

Nigerians had always been aware that the fuel subsidy system was never transparent and was riddled with corrupt practices for ages. The quantum of revelations of what was going on in the management of the so-called Petroleum Support Fund (PSF) under the custody of the Petroleum Products Pricing and Regulatory Agency (PPPRA) – a statutory agency of the Federal Ministry of Petroleum Resources – merely attested to this. For example, the PPPRA figures for subsidy payout covering the five-year period 2006-2011 indicated that at the inception of the PSF in 2006, PPPRA paid N261.105 billion in subsidy covering both premium motor spirit (PMS) or petrol and kerosene (diesel and aviation fuels having been earlier deregulated). In 2007, the figure was N278.859 billion; and in 2008, it jumped to N630.571 billion. In 2009, the figure came down to N463.517 billion, and then rose to N673 billion in 2010. But by the end of December 2011, the subsidy payout peaked at a record of N2.59 trillion, according to the final figure computed by the ad hoc committee.

The committee, in the light of its findings, recommended full refund to the nation’s treasury of the sum of N1.06 trillion believed by it to be the amount wrongly or illegally paid to fuel importers/marketing firms and sundry beneficiaries of the subsidy largesse; further in-depth investigations into the role played by some key public office holders, private individuals and corporate entities involved in the alleged fuel subsidy scam, and their possible prosecution, among others. Indeed, the overwhelming majority of concerned Nigerians expressed support for the committee’s recommendations as amended and adopted by the full House of Representatives.

However, as soon as the report started receiving national and international acclaim, those not happy with it started working earnestly to discredit it in its entirety. That is to be expected, especially in a country where for a very long time, civility and rule of law have lost their basic meanings and respectability. But the most daring thing that came to public limelight that could further derail the implementation of the far-reaching recommendations of the ad hoc committee’s report is the sudden outcropping of bribery allegation to the tune of $620,000 against the erstwhile chairman and secretary of the committee, Farouk Lawan and Bernard Emenalo, respectively. The bribery saga emanated from self-confessed Femi Otedola, a very powerful and highly connected Nigerian oil mogul and owner of Zenon, one of the oligarch indigenous oil and gas companies. But whether or not all the machinations against the fuel subsidy report purportedly by the cabal behind the indicted fuel importing and marketing firms will succeed depends on the actions and/or inactions of the executive and judicial arms of government, respectively, as well as further actions and/or reactions of the Nigerian public.

The current Farouk-Otedola saga is not the first in the history of bribery and corruption in Nigeria since independence. It is, however, the one that would show whether or not Nigerians are really interested in and committed to fighting bribery and corruption in all facets of our national life. For example, not long ago, the nation witnessed a litany of corruption scandals, those involving state governors, ministers, permanent secretaries and directors, commissioners, local government chairmen, heads of parastatals and security outfits, etc. Yet, as serious as these record-making cases are, Nigeria is yet to record any landmark success in prosecuting indicted individuals and corporate entities. From the Siemens and Halliburton international bribery scandals, the Malabu Oil deal scandal, the power sector probe, the oil and gas sector probe, to the very recent capital market probe, no indicted individual Nigerian or corporate entity has been successfully prosecuted in the nation’s judicial system. Ironically, former governor of Delta State, James Ibori, who was discharged and acquitted by a court in Asaba, is serving a 13-year jail sentence in a British prison, having been convicted by a British court of stealing funds belonging to Delta State and laundering them to Britain and other European and Middle Eastern countries.

Therefore, how the fuel subsidy scam and the bribery scandal surrounding it are resolved would be a test case of whether or not Nigerian leaders at the executive, legislative and judicial levels have the political will to fight corruption in the country. The whole world is watching Nigeria to do the right and correct things – to at least address the culture of selective justice as well as impunity in looting public funds by the Nigerian ruling elites and their foreign collaborators.

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$620,000 bribe: Farouk Lawan finally in police net

Embattled Farouk Lawan, Chairman, House of Representatives’ fuel subsidy probe ad hoc committee, last night, reported himself to the police headquarters in Abuja.

According to the Deputy Force Public Relations Officer, Frank Mba, Lawan was being interrogated last night and could not say whether he will spend the night at the force headquarters, adding, “I don’t want to pre-empt investigation”.

Police were ready to declare Lawan wanted if he had not showed up yesterday.

Meanwhile, the presidency has denounced what it described as attempt by a section of the media to drag the person and office of the president into the on-going bribery scandal involving Farouk Lawan, Chairman of the House of Representatives’ fuel subsidy probe ad hoc committee and Femi Otedola, chairman of Zenon Oil.

In a statement by the Special Adviser to the President on Media and Publicity, Reuben Abati, the presidency said the attempt was not only “lame” but “diversionary”.

Abati, the presidential spokesman, stated that “the mischievous insinuation in today’s (Thursday) editions of the newspapers that the entire affair, in which the two key players have publicly confessed their roles, is part of a plot by President Goodluck Jonathan and the executive arm of government to unseat the leadership of the House of Representatives is totally false and baseless”.

The statement noted further that for the benefit of unwary members of the public who may be deceived by the political innuendoes now being woven into the subsidy probe bribe affair, President Jonathan wishes to affirm that he has absolutely no reason or desire to meddle in the affairs of the House of Representatives and its leadership.

“Neither the president nor anyone acting on his request or order has anything to do with the scandal that has sadly engulfed the House ad-hoc committee on fuel subsidy. The attempt to drag the presidency into the matter is entirely speculative and without factual foundation.

“Against the background of its avowed commitment to the effective prosecution of the war against corruption in Nigeria, the presidency notes with satisfaction, that given the seriousness of the scandal, the House of Representatives has already recalled its members from recess for a special session to deliberate on it tomorrow (friday).

“Recent developments notwithstanding, President Jonathan’s directive to the Attorney-General of the Federation on the report of the Ad-Hoc Committee on Fuel Subsidy, as adopted by the House of Representatives, subsists and he fully expects that all those indicted in the report will be duly investigated and prosecuted if a prima facie case is established against them”, Abati said.

However, as the House of Representatives reconvenes today to deliberate on the $3 million fuel subsidy scandal, there are strong indications that regional sentiments may play up in the course of debate.
The special plenary session is to be beamed live on major television stations where lawmakers are to express their opinions.

Todaysgist.com, however, gathered that some of the lawmakers are already lobbying to ensure safe landing for the embattled lawmaker and one of the principal officers linked with the bribery scandal.

Meanwhile, one of the lawmakers linked with the bribery scandal, Jerry Alagbaoso, has denied involvement in the $3 million scandal as implied in an online news wire, which described him as the front man for the chairman of the ad hoc committee (Farouk Lawan).

Alagbaoso in a statement stated that he was neither a member of the ad hoc committee on oil subsidy investigating nor a front man to its chairman cum any member(s) as awashed in the media.

The informal meetings, according to sources, were held at different locations including private houses and guest houses in order to keep their deliberations from the media and the public.

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How Government Almost Swindled Nigerians With Subsidy

Don't Place Too Much Confidence In The (President) Who Boasts Of Being As Honest As The Day Is Long. Wait Until You Meet Him At Night. – Robert C. Edwards. But we do not need to wait until we meet at night to ask a very nagging question: What was President Goodluck Ebele Jonathan thinking of when he removed subsidy? What was Ngozi Okonjo-Iweala thinking of? What was Madam Diezani Allison-Madueke thinking of? What was Labaran Maku thinking of? Two men, two women! A President, a finance minister, the petroleum resources minister and the information minister in that order. Still bewildered, the question must be asked:

 What were they thinking of? Had there been no street protests and total paralysis of the Nigerian state in the wake of the January 1, 2012, removal of subsidy on petrol by Nigerians, President Jonathan and his economic advisers would have stuck to their policy of subsidy removal. Indeed, as Nigerians would have been paying for petrol at the intended price of N141 per litre, so would the federal government of Nigeria have been awash with petro naira to play with in the name of delivering on the SURE promises – mind you, SURE was the acronym for Subsidy Reinvestment And Empowerment Programme. 

 Because there is a world of difference between the desire to accomplish and the capacity to deliver, some economists had seen through the SURE programme tones of both intended and unintended consequences. But that was merely on the surface. Today, with the public hearing put together by the House of Representatives’ committee which looked into the management of fuel subsidy and the startling revelations it has come out with, it now appears that President Jonathan and his economic management team were merely out to swindle Nigerians. 

 The committee is demanding that a total of N1,067,040,456,171.31 be refunded back to the coffers of the federal government. The Nigerian National Petroleum Corporation, NNPC, which had become a government unto itself, is asked to refund “N310,414,963,613.00 for subsidy it collected on Kerosene after the subsidy on the product had been outlawed in the country; another N285,098,000,000 for subsidy it collected above the PPPRA recommended amount and N108, 648,000,000 for self discount it granted itself”.

 (See Report on Probe). Now, had all these shady dealings not been exposed via the instrumentality of the probe, Nigerians would still have had to pay the difference in subsidy from where government had hoped to rake in over a trillion to fund its SURE programme. Therefore, if this quantum of graft had already been committed by institutions of government, what guarantees were there that the SURE funds would have been judiciously expended after Nigerians would have been squeezed to pay with their sweat.

 Many had objected to and suspected that the removal of subsidy on the one hand, and the funds to be realized would not be judiciously spent. But why did the Jonathan administration attempt to enthrone a magnifying spectre of double jeopardy on Nigerians: Tax payers money mis-managed through a dubious management of subsidy funds; and causing Nigerians to pay the differential in the subsidy at the same time. 

 In conclusion, the question still begs for an answer: What were President Jonathan and his advisers thinking of? The Subsidy probe report Three months after it began the public hearing on the utilization of the Subsidy regime on petroleum products, the Ad Hoc committee of the House of Representatives headed by Hon. Faruk Lawan on Wednesday submitted its report to the House for consideration and adoption. 

 The submission of the report was the culmination of several months’ investigations to unravel the mystery surrounding the continued bludgeoning of the money spent by the Federal Government in subsidizing the price of Fuel in order to make it affordable to the generality of the people, who believe that the cheap price of fuel was the only benefit accruable to them in a country that is stupendously rich in resources but where mismanagement has kept the people down and poor. 

 It would be recalled that following the rather abrupt removal of subsidy on petroleum products at the beginning of the year and the threat by organized labour to shut down the country to protest the unpopular decision of government, the House of Representatives in an usual resolution reconvened from its Christmas and new year recess to address the then impending disaster with a view to possibly averting the strike by persuading the executive arm of government to rescind its decision while it put in place necessary measures to cushion the possible effects of the subsidy removal.

 As a fall out of that session, the House empanelled the Hon. Faruk Lawan led committee to verify and determine the actual subsidy requirements and monitor the implementation of the subsidy regime in the country. Expectedly, the committee came under intense pressure from both those who had benefitted unduly from the regime and their friends in government who facilitated such benefits to tone down the rhetoric that had characterized the modus operandi of the probe. 

 But for the chairman of the Committee, Hon. Faruk Lawan, the issue of sacrificing his hard earned reputation as a meticulous legislator who has strived to remain above board in a national assembly where scandals have continued to dog its every step as a second skin for cheap popularity among a few Nigerian was not an option. Therefore, when the hearing commenced, it was not only done within the comfort zone of the National assembly. 

the proceedings were beamed live on national television to millions of Nigerians who were awe struck by the magnitude of brazen thievery that had characterised the oil sector in the name of subsidy. So when the Committee submitted its report on Wednesday and reported that the sum of N1,067,040,456,171.31 be refunded to the federation account by the Nigerian National Petroleum Corporation, NNPC, Marketers, companies that refused to appear before the committee as well as the Petroleum Product Pricing and Regulatory Agency, not many Nigerians were surprised by its recommendations but many were flustered by the quantum of money involved in the fuel subsidy charade.

 Giving a break down of the money to be refunded by the various agencies, the committee noted that the Nigerian National Petroleum Corporation which had over the years gained notoriety for its penchant for graft and opaque dealings should refund a N310,414,963,613.00 for subsidy it collected on Kerosene after the subsidy on the product had been outlawed in the country; another N285,098,000,000 for subsidy it collected above the PPPRA recommended amount and N108, 648,000,000 for self discount it granted itself while marketing companies are to refund a N8,664,352,554.00. Companies that failed to appear before the committee are to refund the sum of N41,936,140,005 while the PPPRA is to refund the sum of N312,279,000,000 being excess payment it made to itself.

 The refunds are to be made within three months. Chairman of the Ad-Hoc Committee, Hon. Faruk Lawan who laid the report on Wednesday also recommended that relevant anti corruption agencies should investigate/prosecute all persons and companies that have been found to have committed any crime while those companies that obtained FOREX but failed to import Petroleum products should also be referred to the Anti Corruption agencies with a view to verifying what they used the forex for.

 For a country that is struggling to fund its capital projects since the return to democratic rule in 1999, the realization that contrary to the official figure of subsidy payment of N1.3Trillion being bandied for the 2011 fiscal year, the discovery that what was paid out from the nation’s treasury as subsidy for the year under review was actually N2,587.087 trillion was simply benumbing. This is more so when it is realized that the figure represents more than900% over the appropriated sum of N245Billion for the fiscal year.

 Expectedly, the committee came hard on the Nigerian National Petroleum Corporation for its penchant for sleaze and minced no words in describing it as being a lord onto itself as it has demonstrated that it is not ‘ accountable to any body or authority’. As a way out of this seeming impudence, the committee recommended the unbundling of the corporation to make its operations more efficient and transparent adding that ‘the Management and Board of the NNPC should be completely overhauled and all those involved in the following should be further investigated and prosecuted by the relevant anti corruption agencies’. 

 The infractions for which the committee recommended further investigation/prosecution are: payment of N285.098Billion in excess of the PPPRA recommended figure for 2011; subsidy deductions of N310,414,963,613 for kerosene against a president federation account in contravention of section 162 of the Nigerian constitution and the Illegal granting of price differential (discounts) of crude oil price per barrel to the NNPC to the tune of N108.648Billion from 2009-2011.

 It further recommended that ‘the House do direct for the auditing of the NNPC to determine its solvency. This is as a result of plethora of claims of indebtedness and demands for payments by NNPC’s debtors which, if not well handled, will not only affect the entire economy of Nigeria but also the supply and distribution of petroleum products. The NNPC was not the only government agency that was found to be on the debit side of the law in its transaction. 

According to the report, the Petroleum Product Pricing and Regulatory Agency, PPPRA, which is supposed to ensure that the subsidy is diligently implemented to ensure that the intended beneficiaries of the regime are not short changed, was found to be deeply mired in activities to undermine the very essence it was set up for. According to the committee’s findings, the PPPRA paid N258billion to itself in 2009 and N157Billion in 2010 and even the office of the Accountant general of the Federation, OAGF, was unable to submit details of the bulk payments arrogated to PPPR A and the account from which the bulk sums were disbursed, to the supposed beneficiaries.

 In order to ensure that those who abused their offices were not left to act with impunity, the committee recommended that ‘the Executive Secretaries of the PPPRA who were the Accounting Officers, and under whose watch abuses were perpetrated that led to the government losing billions of Naira should be held liable. We strongly recommend that those who served as Executive Secretaries of PPPRA from January 2009 to October 2010 should be further investigated/prosecuted by relevant Anti-corruption agencies. 

 This should also include the GM Field Services, ACDO/Supervisor Ullage Team 1 and ACDO/Supervisor Ullage Team 2 within the same period for their roles in the management of the ullaging under the subsidy scheme. The organized pilferring of the nation according to the committee’s findings was rather ubiquitous. According to the report, it was discovered that an “ Accountant General that served during the period 2009 was found to have made a payment of equal installments of N999 Million for a record 128 times within 24 hours on the 12th and 13th of January 2009, totaling N127.872Billion. 

 The confirmed payments from the CBN records were made to beneficiaries yet to be disclosed by the OAGF or identified by the committee. We however discovered that only 36 marketers were participants under the PSF scheme during this period. Even if there were 128 marketers, it was inconceivable that all would have imported the same quantity of products to warrant equal payment” the report noted.

 If the officials of government who were supposed to safeguard the nation’s treasury acted in the most brazen manner to deplete it, the marketers who were beneficiaries of the subsidy regime simply went for the kill. The committee in its report noted that it found out that “certain marketers collected subsidy of over N230.184 Billion on PMS volume of N3,262,960,225 litres that from the records made available to us were not supplied. 

 OTHER RECOMMENDATIONS BY THE COMMITTEE

 *Mr. president should reorganize the Ministry of Petroleum Resources to make it more effective in carrying out the much needed reforms in the oil and gas sector. *Given the large and complex nature of the Ministry of Petroleum Resources, the committee recommends that two ministers should be appointed to take charge of the Upstream and Downstream. 

 *The PPPRA should provide the Nigerian Navy and NIMASA advance copies of allocation and vessel arrival notification documents to enable the navy monitor, track and interdict vessels seeking to avoid Naval certification. *The committee recommends that the regulatory capacity of PPPRA be strengthened and the National Assembly should commence the process of amending the Act to make the Agency autonomous *The committee recommends that FIRS should follow up on the companies listed earlier to pay their taxes with due penalties in line with the provisions of the Companies Income Tax Act. 

 *The PSF guidleines should be revised to make Tax compliance a mandatory pre-qualification requirement for all participants under the scheme. *The CBN and the Federal Ministry of Finance should critically examine and review policy guiding payment for importation of petroleum products to avoid the current fraudulent system that allows importers to bring in products from off-shore ‘lome’ or cotonou to qualify for forex payments *The committee recommends that the PPMC management be overhauled.

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Some companies were just incorporated to make money from subsidy – Hon. Lawan Farouk

How was it chairing the committee?  People who heard that you would chair the committee expected that it would not turn out like the power project probe?  The pressure!

It was challenging, in the sense that the responsibilities we were saddled with were very enormous for a number of reasons.  Firstly, given the public interest on the issue of subsidy; given the fact that the setting up of the committee itself was a response by the House of Representatives to the demand on the part of members of the public for transparency in the management of the subsidy funds because subsidy was suddenly removed on January 1, 2012.

It was also challenging because of the demands and expectations from members of the public, especially from a House of Representatives that is constantly being monitored by members of the public.

When we started, we knew the enormity of the responsibilities and we went about it in a manner that should satisfy the yearnings of members of the public for transparency.  It was also with a view to satisfying the yearnings for further understanding of the workings of the subsidy regime with the overall interest of Nigerians being the major consideration.

 The Senate Committee on Downstream had sat before the House Committee commenced proceedings but the latter took the shine off the activities of the Senate Committee on Downstream?

What may have been responsible for that may have been the decision by the House to carry members of the public along in this engagement, given the nature of the responsibility before us.  One, that Nigerians are very passionate about the issue; two because it would affect the lives of every Nigerian so we took the conscious decision to do the public hearing and so I had and still have the feeling that Nigerians were following what we were doing and mind you, being intelligent people, were drawing their own conclusions from what was going on while the probe sessions lasted.

Even before we concluded the exercise, my belief was that we demonstrated our commitment to doing a thorough job and one which Nigerians on their own  had confidence in our ability to do the job in a manner  that would satisfy all.

The interest generated by this committee on subsidy regime management appeared to have generated a higher decibel of response even when compared to the power project probe of 2007.  What assurances can we point at that with what you have done Nigerians should be grateful, putting in mind the fact that the other committee chairman got enmeshed in some controversy?

There are quite a number of issues that are different from the power probe.

The power probe was conducted by the chairman of the committee on power in the House.  What that meant was that he had already worked in some way with the power sector so it was very easy, rightly or wrongly, for people to begin to allude certain things to him or about him because he was the standing committee chairman on power.  So we are different.  I am different.

But there would have been pressures all round – from operators in the sector both private and government operators in that sector?

That is natural but we had a job to do and we had to do it to the best of our abilities but more importantly in the interest of Nigerians.

Mind you, this time around, not only am I not a chairman of any committee related to the petroleum sector, I have never been involved in any of the sector related committee.  My membership of the House in the last 13 years have not placed me in any committee related to that sector; I have never done any business related to that sector itself and, therefore, did not have any relationship in that sector.

Secondly, I think it is important to realize that for us in that committee, we have been in the limelight for a very long time and we have succeeded in building reputations that we are not going to jeopardize just like that.

Thirdly, is the nature of the House of Representatives.  This is a House which, against all odds, elected its own leadership without any interference from any quarters.  It is a House that responded to the yearnings of members of the public by sitting, specially, on a Sunday to discuss a matter that is very dear to Nigerians.  As far as we are concerned, we have done the best we can and we believe that the House will have no reason not to adopt the report of our committee which was what happened.

The implementation is left for the executive.

Given the public interest in the matter, the executive would be expected to take it up from where we have stopped, having fulfilled our constitutional responsibility.

Whatever requires legislative action would receive legislative action.  We want to believe that the President is on the same page with us because he directed the Economic and Financial Crimes Commission, EFCC, to look into it having brought in external auditors to look into the figures.

I can not see any justification for anybody not to implement our resolutions.

There is something intriguing here.  Some observers while watching your proceedings wondered what the whole exercise would amount to – and they have good reasons to so wonder.  If President Goodluck Jonathan, with all the powers at his disposal could plead helplessness that he can not contain the activities of the so called cabal and, therefore, went ahead to remove subsidy, sending helpless Nigerians to the subsidy vultures, what guarantees are there that all these would not become a fool’s errand?

I think a simplistic solution to what is happening is to remove the subsidy.  If the fact that people are paid subsidy is an incentive for people to engage in sharp practices, then removing the subsidy was what the executive thought should be able to solve the problem.

But while the probe went on we believed in our minds that we had achieved something because it would never be the same again.  Even if the exercise had been truncated, we would have achieved something because of the enormous interest that it generated and the perception of members of the public.

We have tried to identify the institutional gaps and lapses in the system that had allowed those things to happen the way they did.

We addressed those.

Going forward, we do not expect that people would continue to engage in these sharp practices based on the recommendations that we have put forward.

I know there were so many discoveries made during the probe. Which ones did you find shocking?

Many!  Beyond what Nigerians were able to see during the public hearing, there were others.  For instance, some of the importing companies that joined the business did so purely to get subsidy funds.

There were even some instances where the companies allocated importation slots were incorporated a few weeks before they  got allocation papers, thereby suggesting that they were incorporated purely to benefit from the subsidy funds.

Some didn’t even have any experience in importation of petroleum products yet some of them were the ones who got very huge allocations.

The composition of the House vis a vis what it is known for by being on the side of the masses, what would you suggest to members of the public as a way forward on matters that affect them because this may not be the end to the issue of subsidy?

It is very important for me to establish that one of the assignments given to the committee is to determine how much would constitute the subsidy for 2012.  This is just so that we can provide for it in the 2012 appropriation bill.  We went very far in determining this because once we are able to determine the level of consumption for 2011, then we can safely project for 2012 as distinct from the guess work that people were doing and which gave rise to the dubious figures that over-bloated the subsidy funds.

We can then be able to determine what should constitute the subsidy per litre.

It is that aspect of the investigation that would help the House to determine what the decision of the House of Representatives would be on the subsidy figures.

source:Vanguardngr

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Fuel Subsidy Probe: Tambuwal Faces Impeachment Threat

Following Wednesday’s release of the report of the House of Representatives’ ad hoc committee on the scandals surrounding the management of oil subsidy, an impeachment threat now hovers around the Speaker of the House of Representatives, Hon. Aminu Tambuwal. Chairman of the Ad Hoc Committee, Alhaji Farouk Lawan, is also facing threats from unnamed forces on account of the panel’s recommendations. In its report, the committee had indicted the Nigerian National Petroleum Corporation (NNPC), the Petroleum Products Pricing and Regulatory Agency (PPPRA), oil marketers and others for unbecoming acts and asked them to refund a total sum of N1.07 trillion. 

Continue reading... The alleged plot, it was gathered yesterday, is already generating tension in the National Assembly. As a first step, security may be strengthened around Farouk Lawan who, sources said, resisted the pressure mounted on him not to expose public officers and oil marketers involved in the fuel subsidy scam. Investigation by our correspondent revealed that some forces in government are uncomfortable with the findings and recommendations of the House Ad Hoc Committee on Fuel Subsidy. A principal officer of the National Assembly said: “The House leadership ignored pressure to water down the panel’s report or treat it in confidence. 

 “The argument of these forces was that the recommendations of the Ad Hoc Committee would hurt the economy and make investors to lose confidence in Nigeria. But the House saw the Ad Hoc Committee’s activities as part of a new era to usher in transparency. “Since the report was released to the public, we have got sufficient signals that some forces are unhappy with the House. Although we do not give a damn, we are watching our back. “These forces have renewed their plot to move against the Speaker and deal with Lawan and members of his committee. 

They want to remove the Speaker for his refusal to check the Lawan panel. They have branded the Speaker as “disloyal” to the PDP and a stooge of those opposed to the administration of President Goodluck Jonathan. “Although the Speaker has maintained that he is putting national interest above partisan consideration, the forces have vowed to unseat him. “We are suspecting that some oil marketers are funding the anti-Tambuwal project. In fact, some of these forces are also planning to blackmail Lawan. 

The House leadership has, however, asked Lawan to lie low and avoid further comments on the report. “We will throw the debate open as from Tuesday and Nigerians will know where their representatives stand on fuel subsidy management. “One of the strategies of the forces is to frustrate the report of the committee by lobbying members to reject the recommendations. “They are also trying to prevail on some House members to ensure that the debate on the report of the Ad Hoc Committee is suspended until the Senate completed its own probe into the fuel subsidy regime.”

 A member of the committee also said: “We have been receiving knocks here and there over the report, but we are standing by our position. The rot in the oil industry cannot continue.” When contacted, the Chairman of the House Committee on Media and Publicity, Hon. Zakari Mohammed, confirmed the plot. He said: “The attention of the House of Representatives has been drawn to calculated attempts by indicted firms and their backers in government to plot the removal and discrediting of the House leadership for allowing the subsidy report to get to the public without being doctored to spare them.

 “The antics being employed range from fanthom charges to intimidation via security agencies. This type of plot will discourage parliamentarians from unraveling corruption and rot in the society. “In spite of all this, I want to assure Nigerians that we will continue to promote transparency in governance and we will not cave in to any form of blackmail from anybody or institution, no matter how highly placed. “In accordance with our legislative agenda, we will continue to partner with patriotic Nigerians to rid our system of rots in whatever form.”

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NNPC cannot defend N1.35tr at N/Assembly

THE Nigerian National Petroleum Corporation (NNPC) was unable yesterday to defend the N1.35 trillion spent in 2011 when it appeared before the Senate and House of Representatives Joint Committee on Petroleum (upstream) to defend its 2012 budget.

Group Managing Director of the NNPC, Mr. Austin Oniwon, who was represented by the corporation’s Group General Manager of the National Petroleum Investment Management Services (NAPIMS), Mr. Morrison Fiddi, could not give details of the 2011 budget and answer whether the funds expended were appropriated by the National Assembly.

He failed to give satisfactory explanations and was unable to convince the joint committee on how the NNPC came about the purported $9.387 billion or $8.722 billion it spent in 2011 when Fiddi presented an overview of the corporation’s 2011 budget performance.

He told the joint committee chaired by Senator Emmanuel Paulker that although the NNPC requested for $10.553 billion as its 2011 budget, $8.722 billion was approved for the year.

‘For 2011, we requested for $10.55bilion but $8.722 billion was approved. In totality, the performance for 2011 was 88 per cent.

The security issue in 2011 affected our operations in the Niger Delta. The security situation was very high, but we are improving and in 2012, we are hoping that it would be better.

‘Also, pipeline vandalisation affected our target, but we were able to achieve 88 per cent.

Hopefully, all these would be addressed in 2012,’ he added.

Surprised about the disparities in the figures quoted by NNPC, Mr. Ajibola Muraino demanded to know how the NNPC came about another figure of $9.387 billion as its approved budget for 2011.

Senator Paulker also asked NNPC to explain how it came up with the $9.387 listed on page 17 of the document the corporation presented to the joint committee, adding that ‘you told us in your earlier presentation that you over-performed in certain areas.

Yet, the chart you presented to us doesn’t reflect anything like that. Where are the figures because the ones you have presented to us do not tally?

‘This country belongs to all of us and we should be able to share ideas on how to move the country forward. Go and reconcile your figures and come back.’

The Moment recalls that the National Assembly had in the past made several attempts to compel the NNPC to forward its budget for consideration and approval without any success.

When President Goodluck Jonathan presented the 2012 budget to the joint session of the National Assembly, Senate President David Mark had warned that the passage of the 2012 would be predicated on the presentation of the budget of the NNPC, Central Bank of Nigeria (CBN), Nigeria Ports Authority (NPA), among other government agencies.

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How we shared N182bn subsidy fund

Five of the major oil marketers that have been benefiting from the Federal Government petroleum subsidy scheme have disclosed how they shared N182 billion among themselves under the subsidy scheme within two years.

The major oil marketers made up of Conoil Nigeria Ltd, A. A Rano, ASB Investment Ltd, Forte Oil Nigeria and Knight Bridge Ltd that appeared before the Joint Senate Committee probing petroleum subsidy, yesterday, in Abuja gave detailed accounts of their various claims running into several billions of naira even as they denied malpractices in the subsidy scheme.

They denied allegations of round-tripping of petroleum products despite admitting that imported petroleum products meant for Nigerian consumption are first taken to Cotonu, in Benin Republic for off-loading en-route Nigeria.

A breakdown of the money as shared by the oil majors showed that Conoil Limited got N46.3 billion as payment for importing 799,621 million metric tons of petroleum product; A A Rano netted N1.2 billion for one approval of importing 10, 000 metric tons; ASB Investment Ltd, N3.016 billion for 28,123,066 million metric tons of petroleum; Knightbridge, N3 billion for importing 75,000 metric tons while African Petroleum, N130 billion, with unpaid claims of N11 billion was reimbursed by Petroleum Product and Pricing Regulatory Agency, PPPRA, after importing 99,000 metric tons of petroleum products.

Managing Director of Conoil, Mr. Biodun Wahab, in his testimony to the committee said the company joined the subsidy scheme in 2008 and had its first approval from PPPRA to import 12,153 metric tons of petroleum products.

Rise in reimbursement claims

Members of the committee questioned the sudden rise in reimbursement claims, alleging that it must be due to the mismanagement of the subsidy scheme.

But Mr. Biodun, however, clarified that the increment was due to the fluctuation of oil prices in the international market while absolving his company of sharp practices.

He said: The cost of crude is a function of the fluctuation in the international oil price which you have to manage. When you look at the price of crude today, it is not as the same as 2009 and 2010. There is a document to back this. We do not do any sharp practice, we do not share vessels with anybody, and we take oil to Cotonu for ship-to-ship transfer because of insecurity at the Lagos port.

Abe takes on Knight Bright

Chairman of the Committee, Magnus Abe, lambasted the Chief Executive Officer of Knight Bright Ltd, Mr. Gregory Enaharo, who claimed that his logistics company got approval from PPPRA to import 75,000 metric tons of fuel, with accompany payment of over N3 billion.

Enaharo had earlier told the committee that the company had no tank farm or retail outlet for distribution of petrol products but, however, got the approval due to its experience in importing raw materials for oil companies like Mobil.

Abe while lambasting him said, You are one of the brief case companies. You have reimbursement of over N3 billion with the logistics turnover of about N100 million. Does this make you a leading logistics company? You have only supplied valves and bolts, but you got three approvals, how did you do it? You do not even have an office, no storage farm, filling stations what do you have?

Why we are probing now Senate

Meanwhile, the Senate has explained that it was not prepared to interfere in the work of the House of Representatives, hence it had to soft-pedal and carry out similar probe of the N1.7tr oil subsidy five days after the lower chamber rounded off its investigation.

This was explained, yesterday, when some oil marketers appeared before the Senate Joint Committee on Petroleum Resources (Downstream), Appropriation and Finance, chaired by Senator Magnus Abe, PDP, Rivers South East to unfold to the committee how much was spent and who collected what from the N1.7tr oil subsidy.

According to Abe, this investigation was on-going before the House of Representatives started its own, we decided not to interfere to allow the House to wind down. The Committee will conclude this investigation in accordance with our mandate. It is, therefore, not appropriate for us to comment on the issue. What the National Assembly is concerned about is the people, we have the interest of the people; whatever will arise will be settled by the leadership of the National Assembly.

At the hearing yesterday, the Senate gave tomorrow as deadline for the Chairman, Capital Oil, Ifeanyi Uba; Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Engr. Austin Oniwo; Executive Secretary, Petroleum Product Pricing and Regulatory Agency, PPPRA, Reginald Stanley to submit all their profiles.

Beneficiaries fault rule of engagement

Some of the oil companies that appeared before the Committee frowned at the way and manner the PPPRA allocates quantities of petroleum products imported by oil companies, just as they called for improvement in the allocation of quantity of oil to be imported, adding that presently some of them were importing below the capacity they would have otherwise desired.

Particularly, Managing Director of Conoil Nigeria Plc, Abiodun Wahab, told the committee that if Nigeria, as a country, must address the present problem that called for the probe, adding that there was the need for a proper re-certification of the industry by the PPPRA, just as he said the way and manner allocations were handled last year was beyond expression.

He, however, advised that the rules must be adhered to for those who do not have any business to be in the industry to find other businesses to engage in, rather than destroy the sector.

Wahab who raised some concern over insecurity on the nation high seas, explained to the committee that his company had allied for as much as I60,000 metric tons but had not been able to get that quantity.

Adding that some of the oil firms had to take their vessels to neighbouring countries such as Republic of Benin and Togo because of inadequate storage facilities at the nations ports.

According to him, We are very clean and we do not engage in any over payment. As a company, we dont share products but the facilities that we have at the port can not take the products that we bring in. We need to split the products but there is a security risk because of the way pirates operate. We have to move to the next port which is near to us in the neighbouring countries. It is because of the difficulties in the jetties.

Speaking further yesterday, Senator Abe, the profiles to be submitted today must contain the memoranda of Understanding, MoU signed by the companies with the PPPRA, record of sales transactions, among others to enable the Committee ascertain who was involved, the level of involvement as well the place of origin of the cargo.

All the companies that participated in this subsidy must submit their profile to this committee to contain MoU in the next forty-eight hours to then focus on issues that will come up, Abe said.

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